~ Perspective from Vancouver

Selling a Strata

Interesting look at the process of winding up a strata corporation and selling its land. The 80% vote is a good beginning, but the courts have the last word. Final approval is contingent upon the court’s concern for minority owners.

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66 thoughts on “Selling a Strata”

Not completely off topic – but has anyone posted on the issue that a number of of co-op owners in west end (in proximity to new arterial development) are being approached to sell . these offers are occurring Building wide – so we are getting single corporate entities De facto taking over ownership of co-op building

The BC Liberals changed the law for condo owners. I bought a condo years ago, without this fear. They changed the law on me. They could change it down to 50% if they desired. If they’re willing to change the law for all us strata owners, why not change the expropriation laws for SFH owners?

I think of expropriation being related to a public agency acting in the public interest, ie building a new public structure (school, road, transit line, etc).

What do your strata rules say about votes? Most require some kind of super majority for major actions, as I understand it. This sets a similar bar, while addressing the problems related to all owners but one being held hostage, which the previous rule allowed.

Didn’t the article talk about the court having the final word for the protection of minority owners?

Getting everyone to chip in for a new roof is not the same as forcing people out of the homes they OWN.

Expropriating 20% of a strata condo to sell to a developer is not in the public interest. Perhaps, you just want to call it a different term and assume it’s all okay. Anyway, courts could similarly have final say on SFH expropriation.

Sorry, you’re not convincing me it’s any different. Put yourself on my side and see if you’d be swayed by what you wrote.

BTW, as I said earlier, I’m still undecided. If I want to sell, I’d be upset at one unit holding me hostage. I m just upset at the unfairness between condos and houses.

WRT freehold properties (not necessarily only residential houses)
– there’s the case of the Del Mar Hotel “blocking” BC Hydro’s expansion on Dunsmuir and the example of the Kingston Hotel not selling for the Telus Garden development

The key point here is that while you own that piece of a building, you don’t own the whole building. This building is, in reality, collectively owned – shared. Which means you don’t have 100 per cent rights over the building as a whole. That is a completely different situation to a house which is owned by only one person, and therefore that one person has 100 per cent say over their property.

Therefore, when decisions are made that affect the building as a whole, compromises have to be made, which don’t have to be made when a single entity owns a complete building.

Decisions on knocking down a building are one of those areas. Sometimes, selling out to a developer is the only way for an owner to get anything for their property, especially once that property has become dilapidated. If that’s the case, it would seem especially strange for one person to prevent 50 people from being able to move at all, since they couldn’t sell their run-down property for anything resembling the real value of the land.

But, in this city, it will not always play out that way. The example of a rundown strata building is understandable, but I’m more worried about people like a long time resident of Kits/Kerrisdale owning a place in a 3 storey walk up or small townhome project. Investors could come in aggressively and buy up enough units to force a sale to a tower developer, essentially doing the Land Assembly thing but with condos.

You guys are worried about the “held hostage owners” situation.
I’m worried about the “force sale investors” situation.
Both will happen. Time will tell what will happen more.

Our strata is 40+ years old, and facing significant repairs in the near future. There are a lot of similar buildings and townhouse complexes in the Lower Mainland, with major maintenance delayed for years or decades to “save money,” major infrastructure like roads and sewers at or near the end of life, and little money in the bank because, again, owners wanted to “save money.”

I am fairly sure that many of our owners, whose homes are valued at perhaps $750,000 would jump at an offer of $1 million, especially if it helps them avoid several tens of thousands of dollars in looming Special Levy charges.

These days strata units are the defacto starter homes, and are usually the only multi-bedroom properties that can still be purchased for under a million dollars. Once they’ve all been sold, torn down, and rebuilt as high end properties we’ll just add to the overall lack of affordable housing.

I’m first to agree that the whole strata concept tends to be a failed experiment, with bullying and intransigence ruling the day, and decisions made that don’t benefit the majority of owners. The Civil Resolution Tribunal will hopefully make some difference, but ultimately you still have unskilled, untrained people making multi-million dollar decisions. That’s a recipe for disaster.

To a family with more than one working adult, and possibly a rental suite (in-suite lock-off rental units were a precedence in the SFU UniverCity project), it’s certainly more affordable than today’s $2+M detached home on a standard 4,000 ft2 lot.

It is now essential to think outside the Vancouver 33-foot box. There are many ideas that have not been fully explored in the missing middle, not even here on Price Tags.

Strata is very problematic from several perspectives. Deferred maintenance in favour of cosmetic (or no) changes is one of the most egregious examples of collective stupidity and short-sightedness around.

I believe there is potentially a huge pent-up market for freehold townhomes and rowhouses, especially with suites. But the key design mitigation strategy that may help to avoid strata would be to build units with independent load-bearing walls, foundations and fire break measures, just as commercial buildings do with their neighbours that for all intents look like they are attached.

With strata condos, you own only half of the depth of the walls, ceilings and floors that are shared with the neighbours. The strata owns a lot of common spaces collectively. This cannot possibly be compared legally or physically to a block of freehold houses or even attached but structurally and legally independent rowhouses. It’s apples and oranges.

And then, of course, you have the politics that always end up playing out with serious personal income, debt, stress and health. Some places are very well run, but others are just too rife with ill-informed strong personalities running the show into the ground. Then come the bubble-wrap and scaffold cowboys … or the demolition crew.

All this worry over affordable homes in the city. Who do old condo owners think they are to stand in the way of some nice developer building commoditized investment units for foreign buyers? Sure they’ll have to move out to the suburbs or the Interior after selling, but that’s the law of the real estate jungle.

Remember the little green house at 1062 Richards – Linda Rupa refused to sell until she finally accepted $6M in 2007 – enough to keep her in care home glory until her dying day. In her case, it was her choice not to sell until the developer made her an offer she couldn’t refuse.

In Vancouver’s Single Family Heaven, that choice is thwarted by zoning. Case in point: the area around Nanaimo and 29th Ave Stations. Other stations have towers while these are practically bucolic. Illogical.

I first heard about 1062 Richards at a community meeting – Linda Rupa was made to sound like a victim – that developers were making her life untenable and she was held up as an exemplar of fighting greed.

She had a double lot and had decent cash flow from a parking operation she ran from it, so she was hardly a shrinking violet.

And what was the consequence of her selling – in her eighties. Wouldn’t it have been better to sell for less a decade or two earlier – to have time to enjoy the money. At any rate, she earned a pile; the developer made money; as did many trades people; hundreds of people got homes; and the city boosted its tax base massively. Win, win, win.

I think it is a very happy state that one owner can’t hold hostage 50 others. As a condo owner you do not control the building; you own a share of it only. As such more compromising is required than owning a house. Not just this forced sale, but also quality of hallway carpet, landscaping standards, frequency of paint jobs, choice of door handles to name a few items where you also cannot force your way !

It’s a sad state of affairs when neighbors can force you out of your home for no other reason than their own greed for financial gain. It’s a good reason not to buy a condo because a condo is not really a home which can be secured by the owner, the most essential quality of a home. A condo is only an illusion of a home, a product wrapped in a cloak of lies.

No one is forced to buy a condo. You know you have to compromise when you buy. It is regulated by what is called strata act, by-laws and/or condo rules. Those rules on occasion change. If you don’t like this, then buy a fee simple house or townhouse.

What “cloak of lies” ?

Houses also can be expropriated, which is rare, but it does happen sometimes when the city wants to widen a road, for example, or install a new LRT line. Rarer, but it still happens. Should this also be disallowed ? Is this not why we have courts to adjudicate that ?

Bill 40 may not even stand a charter challenge. This legislation creates an inequality where none existed and then discriminates against that minority.

Furthermore, it removes the right of an owner to the very security that ownership provides. This is no small matter for owners.

Bill 40 is designed to assist developers in the acquisition of property for redevelopment where additional height and density can be obtained. Such properties will typically be older, smaller and affordable, three & four story walkups along arterials that have been up-zoned for example. This also is discriminatory as not all condos will become targets of developers, only those which the City through its land use policies and zoning by-laws makes profitable for re-development if they can be obtained at low cost.

My fourth point; Bill 40 is an unfair interference in the marketplace on behalf of business interests against the rights of home owners. There is nothing to prevent a developer from buying a condo other than the refusal of an owner to sell, so why does the government need to assist the developer in the pursuit of profits?

Finally, there are a multitude of reasons why an owner will not sell. Not all matters in life are solved with money.

I am not a developer, but I am a strata lot (co)owner. I appreciate the change in rules that will make it possible to sell in the future if we (and a significant majority of owners in our strata) want to do so. Other significant issues in stratas are decided by a 3/4 vote. It was unreasonable that this one issue required 100%.

Does the “we” mean all less one or does it mean you and your partner? You can sell your strata at any time to anyone, why would you want to sell it to a particular someone? Is it because you don’t actually want to sell your unit, but rather that you want to sell a building most of which you don’t even own?

Those of you who see windfall dollar bills flowing into your pockets from Bill 40 should realize that the risk of purchasing a home that can easily disappear will reduce the value of that home. It is the reason for the 100% rule in the first place. Likewise, expect that a developers’ offer will be lower under the 80-20 rule than under the 100% rule. Divide and conquer rules produce lower prices for developers.

Keep in mind that real estate does not always appreciate, sometime it stagnates, sometimes it depreciates, sometimes the economy tanks thus producing circumstances in which it is better to have a roof over your head than to be turned out of your home by neighbors who can’t pay their own mortgage or keep up with management fees.

And sometimes that celebrated roof over your head is leaking because some other strata lot owners can’t afford the special assessment which would pay to repair it.

It isn’t like the 80% vote is the final word. Stratas then need to apply to the court and receive permission to wrap up the strata. No such balance in the previous law, which left owners without recourse, held hostage by as few as one negative vote.

This isn’t about property developers, no matter how evil you imagine them to be. It is about strata owners.

Anyone know who pays the court costs? In this case, is it the numbered company who is buying the Oak St building? Do the hold-out owners need to provide lawyers, attend hearings, etc? You can understand why I’m asking this.

One of the significant problems with the strata act is that strata councils usually have access to “Free” lawyers, paid for by their insurance company, while individual owners pay for legal help out of their own pocket. The imbalance in power is self-evident, particularly because (pre-CRT) the only avenue of appeal was an action in Supreme Court.

In practice a hostile council could get away with murder unless an owner was prepared to spend significant money to fight them, against the more or less bottomless pit of money that financed the strata legal team.

If that celebrated roof over your head is in fact leaking then the Strata corporation is obliged to repair it, by law. If insufficient funds are on hand and an owner will not pay their share the corporation can take out a lien and can, if ultimately required, petition the court and force the sale of a unit to cover the owed funds.

Jeff Leigh; You previously stated that “significant issues in stratas are decided by a 3/4 vote”, which would seem to take care of the leaky roof issue. Are you now stating that the sale of a building is the only option for the repair of a leaky roof? Sounds like a ridiculous remedy.

I’m really surprised at the lack of empathy for some people who may be living in a neighbourhood and building for decades, only to have it torn out from underneath them. So much for being interested in “community”.

I’m surprised that you don’t acknowledge the community comprised of the strata owners who want to sell. Perhaps some may want to move into the new building on the same site, and keep living in the same neighbourhood.

Individual strata owners can sell now. You don’t need the entire building to approve if you want to sell your individual condo at the current market rate.

Sounds like you are arguing that owners who let their buildings fall into such disrepair that the only way for them to get out is to tear down the whole building should be rewarded by getting a windfall above market rate.

My goodness, Bill 40 could be an incentive for owners and investors of well-maintained older buildings to let them deteriorate, waiting for the big windfall payout. I can even imagine neighbours fighting at strata meetings, “We should fix the roof, it’s leaking.” “No! Just leave it! We should sell the building! I’m voting NO for everything! Who’s with me? It’s worth more dead than alive!”

BTW, I’d love to get everyone’s opinions on these Land Assembly sales that we’re seeing pop up. These are when a whole row of SFHs decide to list their properties together in hopes of selling to a developer who wants to rezone for a strata.

I’m thinking, suppose no developer wants to pay that much, or the developer knows it’ll be too hard to rezone. In that case, there will be no developers interested in buying, and the houses will just sit on the market.

Meanwhile, if one of the SFH owners needs to sell because of a divorce, death, job relocation, etc, who would buy that house? No family looking for a house to live in will buy one that is part of a Land Assembly.

It’s almost like once you agree to list your house as part of a Land Assembly, you will either get above market value, or way below market value.

In a rising real estate market, there already is an incentive for some strata lot owners to block needed repairs, as they await their windfalls. All this legislation does is provide one path to breaking that deadlock.

I was surprised with the 80% threshold. I tend to think 90% is sufficient to pry out unreasonable or irrational owners that hold on when common sense indicates that it’s time to move on. The reasons for rebuilding can be many. Many buildings are only built for an expected life span of around 35 years. New technology coming on line faster than ever also need to be factored in, including heating, lighting, water-heating, insulation and widows. If energy is ruled to be only renewable, as the City of Vancouver thinks they can decide, then expect prices to jump up, as they have in all other jurisdictions where this has become an ideological issue. If this happens then people will be clamouring for tighter buildings to save money. Then, there could be issues with off-gassing of interior finishings that can be mildly toxic and linger within a tight volume. Properties situated in areas, and there are many in Canada, were radon rises from the earth, also need to be liberally ventilated because radon is very nasty. As we all buy Teslas we’ll need proper power connectors and in a strata or an older property the electric system may well need to be updated at substantial cost.

Deep rural property is more an enjoyment and a long-time buy. Urban property worldwide tends to be much more of a risk and requires careful calculation, consideration, negotiation and contractual precision because it is a commodity.

@Kirk One reason why we see ever higher condo prices is that is very hard, i.e. VERY EXPENSIVE to pry people out of their single family houses (SFH). As such a land assembly costs time, several years typically, and above market SFH prices, and as such the condo to be built has to show sufficient profit to pay for the risk and time involved assembling these 4-8 SFHs. One guy balks, and the 7 lot assembly is bust.

That is the very reason why housing affordability in Vancouver is tough to achieve even with new supply and why lower density, i.e. 3-4 story or THs are tough build as they do not allow for enough developer profit given the time & risk it takes to assemble SFHs ! Add CACs to this and there is the receipe for high housing costs !

There was a report yesterday on the CBC about West Vancouver losing population every year since 2011 that mentions a councillor pointing out the issue of an aging population: “So you go from having a four or five-person household to a little old lady living in a larger house.”

There’s one living behind us – has occupied a huge house by herself for over twenty years. She’s not leaving until they carry her out.

There’s another a block away, who in her eighties started shacking up with a boy friend. She’s pretty amazing – still drives.

I don’t blame either of them for staying put. Nothing would induce me to live in an old age home. Just the thought of it triggers angst-ridden claustrophobia – stuck with no escape until you expire – the sheer boredom of it makes death welcome. Some of these oldsters don’t get along. The only way to avoid each other is for one of them to die.

Which brings up the subject of Universal Design. The only concession to building for variously-abled people has been lever door handles. There is virtually nothing available for people to age in place.

A condo would not appeal to either of the lol’s mentioned above. A big part of what keeps them going is spending time in their yards. Stacked townhouses don’t work because there are steps up and down. That leaves side-by-sides – whether it’s duplexes or a row of townhouses.

I spent quite a few years in a freehold 12 unit rowhouse. The problems with them were transmitted noise; how do you fix your section of the roof; and lack of sunlight. A purpose-built Universal Design rowhouse should have a lifetime roof; proper firewall separation as described by Alex Botta; and, ideally, a north-south orientation – esp. stepping the upper floor to allow more light penetration and a little upper deck. East-west rowhouses are less desirable. There should be the provision for installing a stairlift.

These units would entice some little olds and free up real estate for higher density. And Vancouver’s mutant laneway houses should all be Universal Design.